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Brexit chaos restrains South Korean stocks; foreigners buy for 6th session

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[SEOUL] South Korea's Kospi stock index closed firmer on Wednesday amid hopes of Chinese stimulus measures, but the latest episode of Brexit drama curbed further gains. The Korean won and bond yields rose. The Kospi ended 8.92 points higher, or 0.43 per cent, at 2,106.10.

Expectation for Chinese stimulus measures and uncertainties around Brexit coexisted throughout the session, said analysts at Mirae Asset Daewoo.

China's central bank on Tuesday will make the biggest daily net cash injection worth of 350 billion yuan via open market operations on record, according to traders.

British lawmakers defeated Prime Minister Theresa May's Brexit divorce deal by a crushing margin on Tuesday, triggering political chaos that could lead to a disorderly exit from the EU or even to a reversal of the 2016 decision to leave.

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Foreigners were net buyers of 98 billion won worth of shares. They were net buyers for a 6th consecutive session, marking the longest streak since late August 2018.

The won was quoted at 1,120.1 per dollar on the onshore settlement platform, 0.05 per cent firmer than its previous close at 1,120.7.

In offshore trading, the won was quoted at 1,119.99 per US dollar, up 0.13 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,103.15 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.13 per cent, after US stocks ended the previous session with gains. Japanese stocks weakened 0.55 per cent.

The Kospi is up around 2.8 per cent so far this year, and up by 0.80 per cent in the previous 30 days. The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won. ** The trading volume during the session on the KOSPI index was 492,712,000 shares and of the total traded issues of 897, the number of advancing shares was 507.

The US dollar has risen 0.6 per cent against the won this year. The won's high for the year is 1,113.81 per dollar hit on Jan 11 and the low is 1,130.05 on Jan 3.

In money and debt markets, March futures on three-year treasury bonds fell 0.02 points to 109.29. The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.86 per cent, while the benchmark three-year Korean treasury bond yielded 1.805 per cent, higher than the previous day's 1.80 per cent.

REUTERS